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State of Kerala Etc. Etc. v. The Principal, KMCT Medical College and Ors. Etc. Etc.

Civil Appeal · 2025 INSC 518Decided 16 May 2025
Civil Appeal Nos. 6908-006911 of 2025 (arising out of SLP (C) Nos. 9885-9888/2020 and connected matters)
Justice Surya Kant · Justice Nongmeikapam Kotiswar Singh . **

Background

Under Kerala's 2017 law regulating fees at private medical colleges, the State's Admission and Fee Regulatory Committee had fixed NRI-quota fees at Rs. 20 lakh per year, with an extra Rs. 5 lakh per student to be set aside as a "corpus fund" to subsidize education for economically weaker section (BPL) students. This led to cross-litigation: the State challenged a government order being quashed, private colleges objected to how the corpus fund could be used, and NRI students sought a refund of the extra amounts collected from them, all arising from Kerala High Court rulings on the scheme.

Decision Breakdown

The Supreme Court upheld the broad scheme of using a corpus fund drawn from NRI-quota fees to subsidize BPL students' medical education, referencing the Court's earlier ruling in P.A. Inamdar v. State of Maharashtra on regulating self-financing institutions. It rejected the NRI students' claim for a refund, directing them instead to pay their full fees as approved, while directing colleges to allow the State/Committee to verify compliance through their accounts. The Court's detailed directions balanced the interests of the State's welfare objective, the colleges' fee autonomy, and the students who had already paid.

Lesson Learnt

State regulatory schemes that cross-subsidize disadvantaged students using fees collected from other quotas (like NRI seats) can be constitutionally valid, and students who pay fees under such an approved scheme are not automatically entitled to a refund merely because they contest the scheme's fairness.

Official source (sci.gov.in)View Judgment (PDF)

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